In 2014, Jill, age 35, received a job offer with two alternative compensation packages to choose from. The first package offers her $119,000 annual salary with no qualified fringe benefits, requires her to pay $5,400 a year for parking, and will purchase life insurance at a cost of $1,800. The second package offers $109,000 annual salary, employer-provided health insurance, annual free parking (worth $390 per month), $212,000 of life insurance (purchasing on her own would have been $1,800 annually), and free flight benefits (she figures that it will save her $5,600 per year). If Jill chooses the first package, she would purchase health and life insurance benefits at $5,000 and $1,800, respectively, annually after taxes and spend another $5,600 in flights while traveling. Assume her marginal tax rate is 28 percent. (Use Exhibit 12-10.) Exhibit details- 5 year age bracket 35-39 Cost per $1000 protection for one month $.09

a-1.

Which compensation package should she choose?

	Package 1 offers her $119,000 annual salary with no qualified fringe benefits.
	Package 2 offers $109,000 annual salary plus health and life insurance benefits.

a-2.	How much would she benefit in after-tax dollars by choosing this compensation package instead of the other compensation package? (Round your answer to the nearest whole dollar amount.) After-Tax dollar amount _________

b-1.

Assume the first package offers $135,000 salary with no qualified benefits instead of $119,000 salary plus benefits. Which compensation package should she choose?

	Package 1 offers her $135,000 annual salary with no qualified fringe benefits.
	Package 2 offers $109,000 annual salary plus health and life insurance benefits.

b-2.	How much would she benefit in after-tax dollars by choosing this package? (Round your answer to the nearest whole dollar amount.) After Tax dollar amount __________